A comprehensive guide to auto insurance in the The Natural State, including minimum coverage amounts
Take an in-depth look at Arkansas car insurance laws, including mandatory minimums, penalties for driving without insurance, and the legal implications of lending your vehicle to a friend or family member.
Imagine you’re driving through Fayetteville, Arkansas when you spill your coffee and accidentally swerve into the oncoming lane. You collide with a station wagon driven by a woman who is taking her elderly father to a movie. The elderly man is paralyzed in the crash, and the woman suffers a traumatic brain injury (TBI).
When a police officer asks you for your insurance information, you suddenly realize that your car insurance expired last summer and you forgot to renew it. The following month, you’re served a lawsuit demanding $8 million in damages.
This scenario highlights the importance of understanding and complying with car insurance laws in Arkansas.
Minimum auto insurance requirements in Arkansas
Arkansas Code § 27-22-104 requires anyone who drives a motor vehicle or motorcycle in Arkansas to carry liability insurance with the following minimums:
- $25,000 for injuries or death to another person in an accident
- $50,000 for injuries or death to all other people in an accident
- $25,000 for damage to another person’s property in an accident
This insurance coverage is commonly referred to as “25/50/25” coverage.
To comply with the minimum liability insurance requirements in Arkansas, drivers can simply purchase the minimum insurance through a licensed insurance agent or directly from an insurance company. You can contact the Arkansas Insurance Department if you have questions about whether an agent or company is licensed to sell insurance in Arkansas. Keep in mind that liability insurance pays for the damages sustained by other drivers and passengers in a car accident that you cause up to the coverage limits. If the damages exceed your coverage limits, you'll be personally liable for paying those damages. For this reason, many people choose to purchase liability insurance that exceeds the minimum requirements.
Penalties for driving without insurance in Arkansas
Arkansas drivers are required to provide proof of insurance upon request from a police officer. Drivers who don’t have the required insurance may be fined up to $250. What’s more, your license may be suspended, and your vehicle may be impounded.
However, the most severe consequence of driving without insurance is that uninsured drivers who cause an accident are personally liable for all of the damages that result.
Even if you don’t have the money to satisfy a judgment, the other driver can obtain a court order to garnish your future wages and even collect your assets (including, in some cases, your house and vehicle).
Optional insurance coverage
In addition to the mandatory minimum coverage, Arkansas drivers can purchase additional insurance types. Here’s a look at the most common types of optional auto insurance:
- Comprehensive coverage provides coverage for losses other than those caused by a collision (vandalism, falling objects, fire, etc.).
- Collision coverage provides coverage for damage to your vehicle caused by an accident with another vehicle or an object (such as a fence).
- Personal injury protection (PIP) provides up to $10,000 in coverage regardless of who’s at fault (what’s covered depends on the specific policy).
- MedPay provides coverage for medical expenses incurred by you and your passengers, regardless of who is at fault.
- Uninsured motorist (UM) coverage provides coverage for bodily injury and property damage sustained by you or the passengers in your vehicle as a result of an accident involving an uninsured driver. UM coverage is optional in Arkansas, but insurance companies are required to explicitly offer you the option to purchase UM coverage.
- Underinsured motorist (UIM) coverage provides coverage for bodily injury and property damage sustained by you or the passengers in your vehicle as a result of an accident involving a driver who has insufficient insurance to cover the damages.
Will my auto insurance policy cover my rental car?
The answer depends on the insurance company and the specific policy. In most cases, your own car insurance policy will apply to your rental car, but you should contact your insurance company before taking a trip to be sure.
How does car insurance work if a friend or family member borrows my vehicle?
Auto liability insurance coverage follows the car in Arkansas. This means that if you let someone borrow your car and they cause an accident, your liability insurance will pay for the damages to the other person’s car as well as injuries to the other driver and their passengers. If the damages exceed your policy limits, your friend’s or family member’s policy can act as secondary coverage (i.e., their policy will cover the difference between your limits and the actual damages).
PIP and MedPay coverage, on the other hand, typically follow the driver in Arkansas.
Pursuing damages after a motor vehicle accident in Arkansas
Arkansas is an at-fault state, which means that the person who causes an accident is responsible for paying the damages that result.
Consequently, if you’re involved in a car accident that’s not your fault, you have three options for recovering damages:
- File an insurance claim with your own insurance company (in this situation, your insurance company will turn around and pursue reimbursement from the at-fault driver’s insurance company),
- File a third-party insurance claim directly with the at-fault driver’s insurance company, or
- File a personal injury lawsuit in civil court against the at-fault driver.
Unfortunately, if the driver who caused the accident doesn’t have insurance, your only options are to file a claim under your uninsured motorist coverage (if you have it) or file a personal injury lawsuit against the driver. The process of filing a personal injury lawsuit requires that you prove the other driver’s negligence and establish your actual damages.
Navigating the world of car insurance in Arkansas can be tricky, but it’s important to understand the laws and requirements to avoid severe legal and financial consequences. Knowing your coverage options and the steps to take after an accident can help protect you and your loved ones.
If you have further questions or concerns about car insurance laws in Arkansas, it’s a good idea to consult with an experienced attorney in the state.